Positioning North America for Global Economic Leadership: the Outlook for Competitiveness 

“International cooperation is vital to keeping our globe safe, commerce flowing, and our planet habitable.” — Angus Deaton, 2015 Nobel Laureate in Economic Sciences

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Various forces are shaping the future of international trade, transforming the rules and patterns that have governed commerce worldwide. These changes, driven by social, political, economic, and technological factors, have a fundamental influence on global operations, redefining supply chains, trade agreements, and business strategies. 

We are currently navigating through a global trade war that has forced countries to rethink their foreign trade policies, especially in regard to the balance between imports and exports. This indicator, commonly known as the trade balance, is defined as a deficit when imports exceed exports, and a surplus when the opposite occurs.

Reevaluating Global Trade Dynamics: Tariffs and Beyond

Import tariffs, a term that has gained prominence recently, are one of the tools countries use to protect their domestic markets from foreign competition. While the world is moving towards free trade, many economic and geopolitical factors still lead countries to impose tariffs as a means of safeguarding their industries. This situation has led to a re-evaluation of international trade dynamics, particularly in North America, where the United States-Mexico-Canada Agreement (USMCA) aims to rebalance trade relations and adapt to these new challenges.

The imposition of tariffs has sparked significant debates, especially as countries attempt to shield their local industries from competition. The effects of tariffs go beyond simple cost increases; they disrupt supply chains, increase operational costs for businesses, and can lead to retaliatory measures. For small-to-medium-sized enterprises (SMEs), these tariffs represent an even greater challenge, as they often lack the financial resources to absorb increased costs or navigate the complexities of new trade barriers.

The Impact of Technology on Multimodal Transportation

In the international trade sector, competition has intensified, becoming more aggressive and fast-paced. According to the International Trade Administration, a division of the U.S. Department of Commerce, the COVID-19 pandemic increased technological advancements in e-commerce by 19%. This shift forced many companies to rapidly adjust their production processes and marketing strategies, prioritizing digital platforms and expanding access to new international markets, and amplifying globalization trends.

The exponential advancement of technology has also revolutionized multimodal transportation, enhancing efficiency through the increased use of autonomous units and route optimization systems. These innovations have streamlined processes, cutting transit times and optimizing costs. As the acceleration of data analytics, fintech engineering, and artificial intelligence (AI) continue to revolutionize the trade and logistics sectors, it is critical that we reassess North America’s strategic approach in competing with economic blocs such as the European Union (EU), the African Continental Free Trade Area (AfCFTA), and the Regional Comprehensive Economic Partnership (RCEP). These competitors are working to build comprehensive trade partnerships in the Asia-Pacific region, all striving to meet the demands of an increasingly informed global consumer, who expects better products at lower prices with expedited deliveries.

A Historical Perspective on North American Trade Agreements

The foundation for today’s trade agreements was laid in 1948 with the General Agreement on Tariffs and Trade (GATT), which aimed to promote foreign trade, enhance competitiveness, and protect the global economy from unfair practices. The United States and Canada were among the 23 founding members, with Mexico joining in 1986. GATT provided the first framework for tariff free exchanges between the three nations.

In 1995, the World Trade Organization (WTO) emerged from GATT, establishing the first rules of international trade, including mechanisms for dispute resolution. Its objective remains “to use trade as a means to improve people’s living standards, create better jobs and promote sustainable development.”

A landmark shift occurred in 1994 with the implementation of the North American Free Trade Agreement (NAFTA), signed in 1992. The agreement was designed to eliminate tariffs and trade barriers, creating the world’s largest free trade zone.  In July 2020, NAFTA was replaced by the United States-Mexico-Canada Agreement (USMCA), which, as explained by the Office of the United States Trade Representative, sought to create a more balanced, reciprocal trade environment that supports high-paying jobs and strengthens the region’s economy.

Achievements and Economic Impact

The USMCA has delivered significant benefits across North America, including improved labor standards, stronger intellectual property protections, and enhanced digital trade provisions, while also promoting a more balanced and reciprocal trade environment across the region. The agreement enables the three countries to compete globally and thrive within a healthy, well-integrated economy. 

Figure 1: Foreign Direct Investment (FDI) – Comparison (billions). (Data sources: TradingEconomics.com; U.S. Bureau of Economic Analysis. Aggregate table by Author.)

In recent years, Foreign Direct Investment (FDI) from USMCA partner countries has experienced sustained growth (Figure 1), highlighting the region’s economic strength. FDI is an important indicator that measures the flow of capital between countries and is primarily based on the confidence of foreign governments or companies to invest in other countries for better business and financial opportunities.

Redefining globalization through a new perspective: NASER

With a population of approximately 515.6 million people, a combined GDP of nearly $31 trillion (accounting for almost 30% of the global economy), and goods and services traded at a value of $1.81 million every minute, North America stands as a dominant force in global commerce. To solidify its position as a unified economic bloc, the region must implement strategic initiatives that enhance competitiveness, drive innovation, and ensure long-term stability.

Based on my two decades of experience in facilitating international trade and logistics for a wide range of global businesses, from SMEs to Fortune 100 companies, I believe that a crucial next step in optimizing global competitiveness would be the establishment of  a North American Strategical Economic Region (NASER), an updated version of the current USMCA that builds on its successes, with a new and comprehensive outlook of the region. This would be complemented by an accreditation program that brands regionally manufactured products under the “NASER Certified” label. I propose that this initiative would boost North America’s competitive advantage against global economic pressures by reinforcing key industries and strengthening cross-border collaboration. To maximize its impact, this effort must be supported by targeted regulations in key areas, including:

NASER could provide significant benefits to all member countries, fostering economic growth and regional stability. While ongoing negotiations will inevitably involve sensitive issues, constructive dialogue remains essential for reaching successful resolutions. Lessons from past agreements should serve as a basis for achieving the best results and optimizing future policies, always prioritizing the collective benefit of the region.

Furthermore, the trend toward regionalization in supply chains, driven by the need to mitigate geopolitical risks and ensure greater resilience against global crises, is accelerating the shift toward nearshoring. Companies are moving operations to neighboring countries to reduce logistics costs and ensure continuous supply. This shift is expected to make way for stronger strategic alliances between governments, unlocking new opportunities for businesses across North America.

I propose that NASER would operate through a long-term Corporate Governance, created by the three partner countries and led by professional experts from different key sectors, who would be responsible for developing a governmental structure, with a business vision, respecting the sovereignty of each country. 

With the support of organizations like the OECD (Organisation for Economic Co-operation and Development), which plays a key role in corporate governance through its G20/OECD Principles, the NASER Board could benefit from practical guidelines that strengthen legal, regulatory, and institutional frameworks. By collaborating with the OECD, the Board could add dynamism to the project and ensure high standards across participating countries. Companies would undergo a strict certification program to comply with established regulations, gaining some advantages for doing business in all three countries (Figure 2), as well as access to trade with nations tied to each partner’s individual agreements.

Figure 2: Projected potential benefits of becoming a certified company through the author’s proposed North American Strategical Economic Region (NASER) comprehensive agreement. 

It is important to note that the first joint review of the USMCA is scheduled for July 1, 2026. This presents a pivotal opportunity to evaluate its outcomes, address emerging challenges, and refine trade policies with a global vision. With an open mindset and a commitment to innovation, North America can strengthen its competitive position and ensure the agreement continues to evolve in alignment with the dynamic trends shaping the global economy.

It may sound ambitious, but it is essential for the region to stay competitive in today’s rapidly evolving markets. The sooner this vision is set in motion, the better. By acting as a truly unified entity, focused on amplifying strengths and addressing weaknesses, it has the potential to become the world’s most sought-after economic zone. That would be a true display of leadership.

Creating opportunity in uncertainty

Amidst these shifting dynamics, it is essential for businesses to remain calm and avoid hasty decisions that could have long-term consequences. We are still in the negotiation phase, and the changes we are witnessing are likely to be temporary. However, companies must be proactive in adapting to these shifting circumstances, and must establish open communication channels with their customers and suppliers, to ensure transparency regarding the potential impacts of tariffs and other trade-related challenges. 

In this climate of uncertainty, business leaders are advised to focus on strengthening their financial positions, preparing for the worst-case scenario, but also staying optimistic and open to new opportunities. By reevaluating their processes, optimizing costs, improving productivity, and exploring new markets (whether international or domestic) businesses can not only survive these turbulent times, but find new ways to thrive. There is significant opportunity for U.S. entrepreneurs in viewing their North American partners, Mexico and Canada, not just as suppliers, but also as valuable customers.

The current trade war is fundamentally a struggle for control over the global economy. It’s a high-stakes chess game—everyone has an opinion, but few truly understand the moves. Disinformation has only intensified the tension, evoking parallels to a modern-day Cold War. It’s important to remember that tariffs are merely a means to an end, not the end itself. As Nathan Muir, the seasoned CIA officer played by Robert Redford in the 2001 film Spy Game, said when asked, “What is this about?” — “Money. Free trade, microchips, toaster ovens.”

This shift has led countries to place greater emphasis on their trade balances, aiming for a model that supports growth while strengthening domestic markets. Today, more than ever, the value of domestic production—and its role in creating the jobs needed by the working class—is crucial. That is why there is an urgent need to form a unified North American bloc, one that leads through competitiveness, productivity, and innovation. As long as the US dollar remains the dominant global currency, there is room to make the necessary adjustments to realize this vision. If we can understand the rules of this game, we stand to gain.

Author Bio

Oswaldo Villanueva is CEO and President of VR International LLC, a logistics provider and commercial broker that enables foreign companies to build a successful US business presence. Specializing in integrated commercial solutions for more than 20 years, Mr. Villanueva is a widely recognized expert in customs, logistics, multimodal transportation, and international trade, and has extensive knowledge of the corporate mandate process, with hands-on experience working with both the private and public sectors in investment project strategies. In his current role, Mr. Villanueva oversees the development of consulting services, including business plans for the international trade sector, and plays an integral role in the success of mandates from a diverse range of export industry clients. He is a trusted consultant for the Mexican government across various industries, and previously served as Commercial External Advisor to the Consulate of Mexico in Houston, Texas, where he now resides. He additionally provides education and mentorship to business and entrepreneurial organizations in both Mexico and the US. Mr. Villanueva earned a bachelor’s degree in Civil Engineering from the University of Yucatan, an MBA from the Merida Institute of Technology, and an advanced certificate in Logistics and Global Supply Chain Management from Houston Community College (HCC).

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